What is affordable housing? There are likely as many answers to the question as there are challenges surrounding housing affordability in the Atlanta region. Affordable housing is not a new or simple problem, yet it is a significant issue facing residents, businesses and elected officials across the country. Some counties and cities have adopted economic incentives and tax abatements to encourage development of housing that is affordable to households with varying income levels. Frequently, elected officials feel constrained by public opposition to apartments or smaller homes, and historic development patterns have not helped. Devoid of debate is the simple fact that metro Atlanta is growing, and people need places to live.
Affordable housing encompasses an intricate web of social, economic, political and legal issues. Often the “area median income” is used as a benchmark to determine the level of affordability. The Fulton County AMI published by the U.S. Department of Housing and Urban Development is $67,500. Based on information from Bleakly Advisory Group, 52 percent of the workers in Clayton, Cobb, DeKalb, Fulton and Gwinnett earn $40,000 or less. For households earning between 60 and 80 percent of AMI, rents ranging from $740 to $1,035 monthly range or a home purchase between $123,000 to $170,000 would be the upper limits.
The city of Atlanta is taking steps to assess this complex problem. During the past year, the city became the first in Georgia to adopt an inclusionary zoning ordinance; Atlanta Mayor Keisha Lance Bottoms made a campaign commitment of $1 billion for affordable housing; HouseATL was created as a cross-sector group of leaders to create an actionable plan; and the city appointed its first chief housing officer, Terri Lee. Interwoven in the social, economic and political issues of the problem and various solutions lies the legal landscape of property rights and land use/zoning.
The first zoning ordinance was enacted in 1916 in New York City to separate the industrial from residential land uses. In 1926, the U.S. Supreme Court held land use regulation was a legitimate use of the government’s police powers. To be lawful, the restriction must be related to the public health, safety or welfare. Historically, zoning restrictions divided cities based on the type of property use (industrial, retail, residential, etc.) and the size of the property.
Most, if not all, residential zoning categories are by their very nature, exclusionary not inclusionary. Going back to 1978, the American Bar Association’s Commission on Housing and Urban Growth recognized large lot zoning, minimum house size requirements and prohibition of multifamily housing as exclusionary land use controls used by local governments.
In Burlington County NAACP v. Township of Mt. Laurel, the New Jersey Supreme Court placed an affirmative duty on local governments to combat exclusionary practices and provide for a “fair share” of the region’s need for low- and moderate-income housing. Although the Georgia Supreme Court could have addressed the issue in 2000 (Henry County v. Tim Jones Props., 273 Ga. 190), the court affirmed the trial court’s finding of an unconstitutional taking on other grounds. To date, the Georgia appellate courts have not issued an opinion regarding exclusionary zoning.
The residential zoning districts based on minimum lot and house size continue to prevail in Georgia. Both new and old cities have developed based on this division. In 2016, the White House published a Housing Development Toolkit acknowledging the obstacles created by local land use policies and that the greatest opportunity for innovative efforts to combat housing shortage is at the local level. Earlier this year at the Regional Housing Forum, restrictive zoning regulations that limit the type and quantity of housing units that developers are authorized to build was identified as one of the top three factors leading to the current housing crisis.
Locally, the Atlanta BeltLine spurred significant growth and also controversy regarding property values and rental rates. By adopting an inclusionary zoning ordinance effective January 2018, the city imposed a requirement on new developments with 10 or more rental units in the BeltLine and Westside Overlay Districts to reserve units for households at or below 80 percent AMI or pay a one line in-lieu fee. The developer has the option to select up to three incentives, including: increase density, transfer development rights, eliminate or reduce parking requirements, and priority permit review to expedite the process. Across the country, inclusionary zoning laws have been legally challenged as an unconstitutional taking and a violation of substantive due process. The outcomes of the challenges have varied in jurisdictions. While the inclusionary zoning is one zoning change aimed at providing more affordable housing, this intricate issue will not be solved by this modification alone.
The HouseATL committee acknowledged legal barriers to housing affordability and recommended additional zoning changes. Specifically, HouseATL identified four nonsubsidized housing solutions: co-living in single family homes; increasing density on single family lots through accessory dwelling units, quads and cottage courts; microunits in multifamily developments; and multifamily co-living. To implement these solutions will require changes to the zoning code. Early steps have been taken to allow accessory dwelling units (i.e., tiny house) on properties with a R-5 zoning. The R-5 zoning already allowed for duplexes, but the addition of the accessory dwelling unit opened the door for small (max 750 sq. ft.) living unit instead of a traditional attached duplex. Other changes, such as modifying definitions and providing the opportunity for a more creative use of a traditional single-family structure will take more time. Updating zoning codes to encourage inclusion is one of the many factors that will ultimately influence whether the city reaches the goal of 24,000 new and preserved affordable housing units over the next eight years.
Julie Sellers is a partner at real estate law firm Pursley Friese Torgrimson in Atlanta. Her practice focuses on advocating zoning and land use requests for owners, builders and developers. She is the vice chair of the City of Atlanta Urban Design Commission and a member of CREW, Council for Quality Growth and ULI.